I see this error when installing Sitecore 8.0 using SIM 1.3 or 1.4. Also set permissions for NETWORK SERVICE manually, to wwwroot folder.
How to resolve this.
The solution here worked perfect for me.
https://www.youtube.com/watch?v=qxMGdbz-eEs
To open SQL Server Configuration Manager, in the Search charm, under Apps, type:
SQLServerManager13.msc for [SQL Server 2016] or
SQLServerManager12.msc for [SQL Server 2014] or
SQLServerManager11.msc for [SQL Server 2012] or
SQLServerManager10.msc for [SQL Server 2008], and then press Enter.